Legal Expenses Insurance - A definition

Legal Expenses insurance is taken out by groups of individuals or companies as a precaution against future disputes and the necessary costs of resolving them.

Legal expenses insurance has been available for some time in Australia but in a rather piecemeal, way. Australian insurance companies have not been committed to the development of this insurance to the extent that it is available in the UK and Western Europe.

This is all about to change as from early in 2014 several international insurance companies and major brokers will be entering the Australian and New Zealand markets with an underwriting capacity to provide a broad range of legal expenses insurances based on their long experience and success in Europe and the United Kingdom.

Typically; a legal expenses insurance policy contains a defence and pursuit component.

On the one hand, cover responds to assist an insured party who may be a target for action by another party.

However, the real meat of the cover is the pursuit component. This gives an insured party the muscle to pursue their rights and safely punch above their weight, making their opponents aware they are willing and able to proceed.

There are two main types of legal expenses insurance for consideration.

There is the preferred add-on type product, which is a simple, low cost cover that is added to some underlying product or service, such as motor or household insurance or account statements and billing.

This low cost approach is possible because the consumer does not choose to take the cover. Instead they can opt out if, once provided, they decide they do not want it.

There is also stand-alone cover where the consumer decides to participate. Underwriting experience shows that some of the likely applicants will be those that expect some type of legal problem to occur either immediately or soon.

Therefore a standard exclusion clause indicates that the policy will not respond to pre-existing matters or circumstances already known that may result in dispute.

Stand-alone cover is available for both groups of individuals and small businesses.

Should the reader like to obtain further information and learn more about legal expenses insurance including the likely cost of add-on or stand-alone cover [click here] and we will forward your enquiry to underwriters. Please remember however, this type of cover will not become available in Australia or in New Zealand until late 2013 or early 2014.

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For enquiries or more information regarding this article please contact Paul Evans at Legal Access Services.

DISCLAIMER: This article was provided purely for your information only and you should check other information sources before taking any action based on this article. Neither the author nor Legal Access Services Pty Ltd makes any warranty as to the quality or currency of the information contained in the above article.